Creating Opportunity Where There Seemingly Is None…

While we often speak about maximizing profits and understanding the analytical side of commercial real estate, there is also a flip-side as it relates to quality of life and doing long-term good.

This is evident as-of-late, with a lot of mainstream attention moving towards the environment. While this is an issue that cannot be solved single-handedly, it is something that we can do our part in.

The good news is, the City of Toronto incentivizes investors, landlords, and developers to meet environmental standards – the Toronto Green Standards – in the form of a partial refund of development charges.

It is a win-win for everyone; the resulting product creating a more pleasant and accessible property for the end-users and landlord.

And since the Greater Toronto Area Industrial Market remains hot, with: 

  • demand continually outpacing supply, 
  • vacancy rates at the lowest level in North America (and reducing further), 
  • rising net rental rates, 
  • land sites for development hard to find (unless you venture out to the burbs), 
  • land values skyrocketing, and
  • investment products of any significance hard to find… 

We’ve consistently made the argument that one of the best options is to develop from the ground up and create your own product. Where you could then pre-lease it prior to completion and enjoy a steady and increasing income for the next 10 to 15 years while benefiting from further appreciation in value. 

Last week, we examined the Site Plan Control Application process; with a high-level overview and ‘checklist’ of items and steps you’re likely to come across when developing in the City of Toronto.

Specifically, we laid out an outline of procedures, timelines, a list of required reports, and fees that are required to successfully complete an application (if you missed that issue, check your email inbox or reply and we’ll send a copy over). 

This week, however, we are going to take a closer look at Toronto Green Standard Requirements, and how you could develop to both lower your costs AND create a resulting positive externality and benefits to others…

So, here it is:

 

Toronto Green Standard Requirements

The Toronto Green Standard (TGS) is a two-tier set of performance measures, with supporting guidelines for new development. Its purpose is to promote sustainable sites and building designs that address Toronto’s urban environmental pressures: air quality, climate change, and energy efficiency, water quality and efficiency, ecology and solid waste

This Checklist is part of a Complete Application. It must contain adequate detail on how the design meets the Toronto Green Standard. The Checklist must also reference the appropriate plans, drawings, and reports that demonstrate compliance with the performance measures. The Checklist is completed by the project architect or planning consultant and is submitted to the City Planning staff as part of your development application.

No alt text provided for this image

Industrial Building under construction in the Greater Toronto Area 

Tier 1 performance measures are required by the City and must be addressed as a part of your approved development application.

Tier 2 performance measures are voluntary with higher performance levels. Achieving Tier 2 means that you are eligible to apply for a refund of development charges equivalent to 20% of the 2014 rate.

Tier 1 Performance Level: 

Tier 1 – AIR QUALITY

No alt text provided for this image

Tier 1 – GREENHOUSE GAS EMISSIONS/ENERGY EFFICIENCY

No alt text provided for this image

Tier 1 – WATER QUALITY, QUANTITY, AND EFFICIENCY

No alt text provided for this image

Tier 1 – ECOLOGY

No alt text provided for this image

*Not a complete list of development features to be addressed…

Tier 1 – SOLID WASTE

No alt text provided for this image

Tier 2 Performance Level:

Tier 2 is a voluntary, enhanced performance level. Site plan applications received on or after May 1, 2009 that meet both Tier 1 and 2 of the Toronto Green Standard are eligible to apply for a potential refund of development charges equivalent to 20% of the 2014 rate. 

Completion of Tier 2 involves meeting all of the performance measures identified as CORE and selecting three performance measures identified as OPTIONAL. 

Tier 2 is verified during the construction stage by third party evaluators registered with the City. The detailed eligibility criteria, application, and verification procedures are found at:

www.toronto.ca/greendevelopment

Tier 2 – CORE

No alt text provided for this image

Tier 2 – OPTIONAL (3 development features to be selected)

No alt text provided for this image

*Not a complete list of development features…

At some other time, we will cover in more detail a few of the remaining reports required, such as a Traffic Impact Study, Geotechnical Report, etc. 

No alt text provided for this image

Industrial Building under construction in the Greater Toronto Area 

Conclusion:

The Greater Toronto Area Industrial Market is one of the “tightest” markets in North America with vacancy rates for small- and mid-size-bay product starting at 0.2% and going up to about 1.4 % for larger facilities.

It is very hard to find almost any opportunities to purchase, lease or develop….

If you are looking to acquire industrial investment properties, single-tenant or multi-tenant buildings, investment packages ready to go… Or if you are considering acquiring industrial land or an older industrial site to redevelop please give us a call. We always have a few “off the market” opportunities that could be a good fit.

Likewise, if you are looking to sell an industrial property, we have not seen a more opportune time to do so. Please give us a call for a confidential consultation to see how we can maximize the value of your investment.

Until next week….

 

Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 25 years.

Goran Brelih is a Senior Vice President for Cushman & Wakefield ULC in the Greater Toronto Area. 

Over the past 27 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.

Goran is currently serving as Immediate Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter and on the Board of Directors of Muki Baum Accessibility Centre, a Toronto‐based NGO which provides support to children and adults with complex disabilities.

Specialties:

Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development

About Cushman & Wakefield ULC.

Cushman & Wakefield is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries.

In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, advisory, and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.

Toronto Industrial Intel - Newsletter Signup

Subscribe to Toronto Industrial Intel Newsletter to receive access to off the market opportunities and the latest market information from the street level up.

You have Successfully Subscribed!